NEW YORK (CNN) -- The Obama administration has rolled out a new plan to help more Americans get mortgage modifications. The plan provides assistance to those who have lost their jobs or are underwater on their mortgage, owing more than their house is worth.
According to First American CoreLogic, nearly one in four American mortgage holders is underwater. If you are struggling to make your mortgage payments, a mortgage modification could be a way to stave off foreclosure.
In a modification, your lender makes a change to your original mortgage agreement and you continue to make monthly payments. The lender either lowers your interest rate or stretches out the length or term of the loan so that your monthly payment is more affordable.
In some cases, your lender may be willing to forgive a portion of the loan principal.
With the Home Affordable Modification Program (HAMP) in effect, eligible borrowers could have their month payments reduced to 31% of their pre-tax income.
Here's how to qualify for HAMP:
For a full list of qualifications, go to makinghomeaffordable.gov.
But beware of mortgage-modification scams.
Make sure you are getting legitimate, reliable help from a counselor who is knowledgeable about loan modifications.
The government provides this assistance for free. Call 1-888-995-HOPE to speak to a HUD-approved housing counselor.
If you think you have already been the victim of a mortgage-modification scam, file a complaint with the Federal Trade Commission by calling 1-877-FTC-HELP.
Talkback: Have you tried to get your mortgage modified? (See comments)
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